Chicago Board of Education Approves Pension Payment Agreement
On Thursday, the Chicago Board of Education reached an agreement that could see them contribute up to $175 million to the city’s pension payments. However, this is contingent upon the City Council agreeing to withdraw significant funds from special tax districts known as TIFs. If approved, this step could generate hundreds of millions in additional revenue for Chicago Public Schools.
In the district’s budget discussions, lawmakers indicated that the district would handle pension payments as long as revenue sources exceed the $379 million needed to balance the budget.
If Mayor Brandon Johnson’s ambitious plan for the largest TIF funds draw in history is sanctioned, CPS might receive around $552 million—almost sufficient to cover the full pension payment.
The agreement received unanimous backing from board members, highlighting their support for the CPS budget. The board, comprising 21 members, has a mix of elected and mayor-appointed members.
Board member Michelle Blaise emphasized the significance of this development, noting that previous school boards, while having access to TIF funds, often fell short on pension obligations. She mentioned the necessity of the agreement, acknowledging past inconsistencies.
“I hope this strengthens the partnership between the city and CPS so we can progress together,” she added.
There is considerable pressure on the board to finalize the agreement. Even with approval, there are concerns that it could be disregarded later.
Budget Committee Chairman Jason Irvin expressed that the mayor’s budget would not pass through the committee without the board’s approval of an intergovernmental agreement.
The TIF funding proposition is causing quite a stir within the mayor’s budget plan. Funds generated through TIF are earmarked for district projects, and several City Council members are frustrated that drawing from TIFs would leave fewer resources for initiatives like parks, libraries, and necessary school repairs.
Despite pushback from some council members, a reduction in levies could jeopardize the careful financial planning needed for CPS to balance its budget and fulfill pension obligations by the end of the fiscal year.
After approving the agreement, the school board requested city council members to keep the TIF budget in line with the amounts proposed by Johnson.
At a news conference prior to the special meeting, board members noted that over 30 of the 50 City Council members signed a letter advocating for CPS support through TIF funds, rather than resorting to short-term loans to cover budget gaps. Member Jitu Brown highlighted the names of those who signed the letter.
“We are now urging council members to back the TIF surplus, just as you promised,” said Brown, who represents Westside District 5A.
Board member Karen Zacco pointed out that without the $379 million from TIF, the district would have to implement further cuts, on top of those already made earlier this spring in response to a $700 million budget deficit.
“Especially with the current safety concerns in our communities, we lack enough safe pathways for students to get to school,” Zacco said, representing Northside District 4A. “Principals have stated that school cleanliness is lacking due to insufficient custodial staff. Even if cuts are not directly affecting classrooms, they do disrupt children’s health and learning.”
Representatives from the Chicago Teachers Union indicated they had developed a tool to illustrate the potential cuts each district would face without the $379 million being allocated.
CPS continues to face a challenging budget landscape. The federal government has already retracted $8 million in grants and may withdraw additional funding. Cuts to Medicaid and other benefits could further strain CPS’s budget and the students it serves. Projections indicate that CPS might remain in a budget deficit for the years to come.
Some school board members expressed a desire for the district to retain all TIF funds instead of paying any pensions.
“I cannot emphasize how difficult it is to make this decision amidst numerous challenges and programs that our families rely on, many of which could be supported with the funds returned to the city,” remarked Board Member Jessica Biggs, representing Southside District 6B.
Board members acknowledged that relying on TIF funds isn’t a sustainable solution. Many traveled to Springfield this week to urge state legislators to seek progressive revenue channels to bolster education funding.
